House prices are falling in most Australian capital cities, dragged down by tighter investment standards and less investment going into the property market.
Property industry analysts CoreLogic property data released yesterday shows home prices fell 0.2 per cent in June and are now 0.8 per cent lower over the year on a national basis.
That makes it the ninth consecutive month-on-month drop. It also means house prices have fallen 1.3 per cent since the real estate market peaked in September last year.
The weakest capital cities were Sydney (-0.9 per cent) and Melbourne (-1.4 per cent) with their median prices down to $870,554 and $716,774 respectively.
Sydney prices fell 1.6 per cent over the last 12 months, but Melbourne rose 3.9 per cent.
Hobart was the standout and recorded the largest price increase — rising 2.3 per cent to an average of $436,899.
On the plus side, national dwelling values remain 32.4 per cent higher than five years ago. On the other hand, it’s bad news for property owners who are mortgaged up to their eyeballs and carrying masses of debt.
“This highlights the wealth creation that many home owners have experienced over the recent growth phase, but also the fact that recent home buyers could be facing negative equity,” Core Logic research director Tim Lawless said.
“Tighter finance conditions and less investment activity have been the primary drivers of weaker housing market conditions and we don’t see either of these factors relaxing over the second half of 2018, despite APRA’s 10 per cent investment speed limit being lifted this month.”